This invention relates generally to assigning interchange rates to financial transactions and, more particularly, to methods and systems for assigning interchange rates to financial transactions instituted at a point of sale (POS) or an automated teller machine (ATM) and performed using an interchange network.
Historically, the use of “charge” or transaction cards for consumer transaction payments was at most regional and based on relationships between local credit or debit card issuing banks and various local merchants. The transaction card industry has since evolved with the issuing banks forming associations or networks (e.g., MasterCard®) and involving third party transaction processing companies (e.g., “Merchant Acquirers”) to enable cardholders to widely use transaction cards at any merchant's establishment, regardless of the merchant's banking relationship with the card issuer. (MasterCard is a registered trademark of MasterCard International Incorporated located in Purchase, N.Y.).
For example, FIG. 1 of the present application shows an exemplary multi-party transaction card industry system for enabling transaction card transactions. Various scenarios exist in the transaction card industry today, where the card issuer has a special relationship with a network. The network may also be referred to as an “interchange”. Consideration is now being given to ways of improving implementation of the special or customized issuer-network relationships in the transaction card industry. In particular, attention is being directed to utilizing legacy general purpose bankcard infrastructure to support the transaction routing, merchant accounting, and financial settlement for these special or individualized relationships.
As shown in FIG. 1, at least some known financial transactions involve a cardholder presenting a transaction card to a merchant at a point of sale for purchasing a good or service from the merchant, or presenting a transaction card to an ATM for obtaining cash. In either case, the financial transaction may involve transmitting data between an acquiring bank and an issuing bank. This data is typically transmitted through a bankcard network or interchange (e.g., Mastercard®). The interchange will in at least some cases charge at least one of the acquiring bank and the issuing bank for processing such data exchanges. It is difficult and time consuming for these parties to track these data exchanges and the charges associated therewith. Moreover, there is no known cost effective system for an interchange to track interchange rates that are associated with special relationships with the interchange, and therefore, may be charged a different amount than banks not having a special relationship.